Total asks investors to oppose call to cut indirect emissions

Source: iStock

TotalEnergies SE asked shareholders to vote against an investor resolution calling for the French energy giant to target a reduction in the carbon emissions of its customers.

The non-binding resolution, filed ahead of the company’s May 26 annual general meeting, is backed by activist group Follow This and US and European institutional investors holding less than 1.4 per cent of its shares. They want TotalEnergies to align its goals for so-called Scope 3 emissions — those generated by fuel sold to its clients — with the Paris Climate Agreement by 2030.

Investors are increasing pressure for action to fight climate change as record profits spur some oil majors to slow the transition to renewables. TotalEnergies said that drastically cutting indirect emissions would merely shift hydrocarbon demand to other oil companies and called for shareholders to back its own Sustainability and Climate report. 

“The proposed resolution does not provide a credible response to the challenges of climate change and would be contrary to the interests of the company, its shareholders and its customers,” TotalEnergies said in a statement Friday.

A similar resolution backed by Follow This was approved by nearly 17 per cent of BP plc shareholders at its AGM in London on Thursday, up from 15 per cent received last year, but down from a peak of 21 per cent it garnered in 2021. A resolution backed by Follow This and other investors got the support of almost 17 per cent of TotalEnergies’s shareholders at the 2020 AGM. 

TotalEnergies plans to trim net emissions from its own operations to as low as 25 million tons of CO2-equivalent by 2030, from 40 million tons last year. Those are dwarfed by its Scope 3 emissions, which were 389 million tons in 2022. They are projected to be less than 400 million tons at the end of the decade as the French company increases sales of liquefied natural gas while cutting those of oil products.

The Paris accord aims to limit global warming to “well below” 2 degrees Celsius, and preferably contain it to 1.5 degrees. A United Nations-backed panel last month determined that “deep, rapid and sustained” cuts in greenhouse gas emissions are necessary to keep climate change within livable limits.

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